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Parallax Health Sciences Reports Third Quarter 2019 Financial Results

November 18, 2019

Company Increases Revenues by More Than 700% and Reduces Operating Loss by 10% Over Prior Year Nine Months Period

Santa Monica, CA - ( ) - November 18, 2019 - Parallax Health Sciences, Inc. (OTCQB: PRLX) (“Parallax”), an outcome-driven connected healthcare company, reports financial results for the three and nine months ended September 30, 2019 and provides a business update. “We are continuing to make progress, and our third quarter shows improvement in revenues and a reduction in expenses, while we reduced our shareholders deficit to under $5 million from more than $28 million in less than two years since December 31, 2017.  We have positioned Parallax and its operating subsidiaries for accelerated growth, and upon completion of additional financial engineering, we expect the Company’s financial performance to demonstrate marked improvement in the future,” stated Paul Arena, Chief Executive Officer of Parallax Health Sciences. “In addition, we are getting ready to launch our service offerings across a number of verticals with a software-as-a-service (SaaS) business model to provide recurring revenues.  We also continue to execute strategic intellectual property licenses that are highly profitable to us, and give us a further upside through royalty revenues in the future.”“The global IoT in the healthcare market size is projected to reach over US$500 billion by 2025, expanding at a compounded annual growth rate of nearly 20% over that same period. Our technology platform provides vital outcomes optimization, as well as measurement and interventional tools, that are poised to meet the scale and extraordinary demands of our growing marketplace,” Mr. Arena added. “Our platform is ubiquitous, connecting to all IoT devices, and is the only platform that enables legacy and non-IoT diagnostic and biometric measurement devices to deliver data to the cloud. Our Good Health Outcomes platform has been developed to address the nearly US$1 trillion in waste in the US medical system by addressing patients’ adherence to medical and pharmaceutical regimens.” Third Quarter Financial HighlightsTotal revenues from continuing operations for the three months ended September 30, 2019 were $25,855, compared with total revenues of $990 for the third quarter of 2018. A net loss from continuing operations of $2.4 million was recognized for the third quarter of 2019, or $0.01 per diluted share, compared with a net profit from continuing operations for the third quarter of 2018 of $25.0 million, or $0.12 per diluted share. The $27.4 million difference in net income from continuing operations is primarily due to extraordinary gains from the disposal of a subsidiary, and related extinguished debt, recognized during the 2018 fiscal year.Cost of sales from continuing operations for the third quarter of 2019 were $3,899, compared with cost of sales of $5,230 for the same period last year. The decrease is due to lower expenses related to the human capital necessary to facilitate the effective delivery of the Company’s remote patient monitoring and related services to its customers.  Gross profit for the third quarter of 2019 was $21,956, an improvement from a gross loss from continuing operations of ($4,240) in the quarter ended September 30, 2018.General and administrative (GA) expenses for the third quarter of 2019 were $1.9 million, a 10% decrease from GA expenses from continuing operations of $2.1 million for the same period last year. The decrease was primarily due to a reduction in legal and professional fees of $300,401. Stock compensation of $1.15 million represented a major component of GA expenses in the third quarter of 2019.In the third quarter of 2018, the Company deconsolidated RoxSan Pharmacy, recognizing a gain of $5,079,416, as well as a gain of $22,781,281 from the debt extinguished in connection with the subsidiary.Net income (loss) from continuing operations for the three months ended September 30, 2019 was ($2.4) million, or ($0.01) per diluted common share, compared with net income of $25.0 million, or $0.17 per share, for the same period last year. Year-to-date Financial ResultsTotal revenues from continuing operations for the nine months ended September 30, 2019 were $77,745, compared to total revenues from continuing operations of $10,749 for the same period last year. The increase in revenues is primarily due to licensing fees collected in the current year.  Gross profit increased to $64,874 for the nine months ended September 30, 2019, compared with a gross (loss) from continuing operations of ($4,758) for the nine months ended September 30, 2018, an improvement of $69,632.  Total operating expenses decreased to $5.20 million for the nine months ended September 30, 2019, compared with operating expenses from continuing operations of $5.25 million for the same period last year.The Company recorded a net operating loss from continuing operations of $5.1 million, or $0.02 per diluted share, for the nine months ended September 30, 2019, compared with a net operating loss of $5.2 million or $0.03 per diluted share, for the same period last year.Discount amortization and interest expense decreased significantly, from $4.5 million for the nine months ended September 30, 2018, to $0.5 million for the current year, a reduction of over $4.0 million.A net loss of $6.5 million was recognized for the nine months ended September 30, 2019, compared to net income of $17 million for the same period last year.  Excluding the extraordinary gains of $28 million recognized in the prior year, the net loss for the current year was reduced by $4.2 million.Business OutlookThe Company forecasts that recognizable revenues will be sufficient to achieve breakeven from operations by the end of 2020, subject to the conversion of prospective business opportunities into revenues within the period.Intellectual Property PortfolioParallax’s solutions are supported by its intellectual property portfolio. The Company now owns or has exclusive licenses for 5 patent families and 15 patents with 6 additional patents pending with the United States Patent Trademark Office, along with hundreds of claims. The claims cover a broad range of the Company’s proprietary technologies and products. Parallax also owns 4 trademarks protecting the names of its products and identity in the marketplace.About Parallax Health Sciences Parallax Health Sciences is an advanced technology, outcome-driven telehealth company that allows for cost-effective remote diagnosis, treatment and monitoring of patients through proprietary platforms of integrated products and services. The Company’s interoperable novel applications provide patients point-of-care testing and monitoring with information communicated via internet-based mobile phone applications that are agnostic as to operating system and are built on highly sophisticated data analytics. Information is retrieved real-time by physicians who are monitoring patients with chronic diseases or through biometric feedback for health-related behavior modification, and is automated for integration into electronic health records. The Company’s products and offerings capitalize on the digital transformation in healthcare for improved patient compliance, diagnosis and treatment, and support healthcare system cost savings and efficiencies. For more information, please visit   or  .Forward-Looking StatementsThis release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements regarding our expected future financial position, results of operations, cash flows, financing plans, business strategy, products and services, competitive positions, growth opportunities, plans and objectives of management for future operations, as well as statements that include words such as “anticipate,” “if,” “believe,” “plan,” “estimate,” “expect,” “intend,” “may,” “could,” “should,” “will,” and other similar expressions are forward-looking statements. All forward-looking statements involve risks, uncertainties and contingencies, many of which are beyond our control, which may cause actual results, performance, or achievements to differ materially from anticipated results, performance, or achievements. Factors that may cause actual results to differ materially from those in the forward-looking statements include those set forth in our Form 10-K and other reports filed with the SEC. We are under no obligation to (and expressly disclaim any such obligation to) update or alter our forward-looking statements, whether as a result of new information, future events or otherwise.Investor Contact:Paul Arena  cell 404-915-8449   PARALLAX HEALTH SCIENCES, INC CONSOLIDATED BALANCE SHEETS       September 30,2019 December 31,2018  Unaudited   ASSETS      Current assets      Cash and cash equivalents$11,973 $262 Operating lease right of use asset 77,494  –– Total current assets 89,467  262        Investments 1,000,000  –– Property and equipment, net 2,408  –– Intangible assets, net 488,570  579,035 Deposits 7,800  –– Goodwill 785,060  785,060        TOTAL ASSETS$2,373,305 $1,364,357        LIABILITIES AND STOCKHOLDERS’ DEFICIT      Current liabilities      Accounts payable and accrued expenses$2,419,514 $2,655,138 Operating lease liability 77,494  –– Derivative liability, short-term 53,920  23,925 Debentures, convertible ––  724,903 Debentures, convertible, related party ––  411,006 Notes payable 360,000  –– Notes payable, related party 126,152  –– Notes payable, convertible, net of unamortized discount 680,176  296,000 Notes payable, convertible, related party 20,000  –– Related party payables 1,474,436  1,004,720 Total current liabilities 5,211,692  5,115,692        Long-term liabilities      License fees payable 450,000  430,000 Royalties payable 316,258  310,000 Derivative liability, long-term ––  34,000 Debentures, convertible, net of unamortized discount ––  184,870 Notes payable, related party 633,294  –– Notes payable, convertible 576,154  720,154 Notes payable, convertible, related party ––  491,100 Notes payable, bank 21,320  28,995 Total long-term liabilities 1,997,026  2,199,119 Total liabilities 7,208,718  7,314,811        Stockholders’ deficit      Preferred stock, $.001 par, 10,000,000 shares authorized, 978  1,014 977,352 and 1,013,691 issued and outstanding      at September 30, 2019, and December 31, 2018, respectively      Common stock, $.001 par, 500,000,000  shares authorized, 234,455  158,113 234,454,740 and 158,113,141 issued and outstanding      at September 30, 2019, and December 31, 2018, respectively      Additional paid in capital - preferred 1,599,036  1,699,000 Additional paid in capital - common 19,479,319  11,382,341 Subscriptions receivable (500,000) –– Accumulated deficit (25,649,201) (19,190,922)Total stockholders’ deficit (4,835,413) (5,950,454)       TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT$2,373,305 $1,364,357         The accompanying notes are an integral part of these consolidated financial statements.   PARALLAX HEALTH SCIENCES, INC. CONSOLIDATED STATEMENTS OF OPERATIONS Unaudited       For the three months ended For the nine months ended  September 30,2019 September 30,2018 September 30,2019 September 30,2018      As Restated     As Restated              Revenue$25,855 $990 $77,745 $10,749 Cost of sales 3,899  5,230  12,871  15,507 Gross profit (loss) 21,956  (4,240) 64,874  (4,758)             General and administrative expenses 1,937,991  2,116,821  5,203,088  5,252,498              Operating loss (1,916,035) (2,121,061) (5,138,214) (5,257,256)             Other expenses            Gain on disposal of subsidiary ––  5,079,416  ––  5,079,416 Gain (loss) on fair value adjustments 1,253  (93,700) 105,141  (156,300)Gain (loss) on extinguishment of debt (347,612) 22,931,148  (915,615) 22,931,148 Loss on settlement ––  ––  (33,272) –– Discount amortization (48,000) (155,000) (19,000) (2,775,000)Interest expense (149,914) (660,518) (457,319) (1,741,726)Total other expenses (544,273) 27,101,346  (1,320,065) 23,337,538              Net income (loss) – continuing operations (2,460,308) 24,980,286  (6,458,279) 18,080,282              Net income (loss) – discontinued operations ––  93,773  ––  (824,398)             Net loss$(2,460,308)$25,074,058 $(6,458,279)$17,255,884              Net income (loss) per common share – basic            Continuing operations$(0.011)$0.167 $(0.034)$0.124 Discontinued operations$–– $0.001 $–– $(0.006)             Net income (loss) per common share – diluted            Continuing operations$(0.009)$0.120 $(0.028)$0.088 Discontinued operations$–– $–– $–– $(0.004)             Weighted average common shares outstanding - basic 218,115,643  149,431,153  190,038,071  146,294,981 Weighted average common shares outstanding - diluted 262,011,413  208,254,652  233,933,841  205,118,481               The accompanying notes are an integral part of these consolidated financial statements   PARALLAX HEALTH SCIENCES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS Unaudited     For the nine months ended  September 30, 2019 September 30, 2018    As Restated Cash flows from operating activities:      Net income (loss)$(6,458,279)$18,080,282 Adjustments to reconcile net loss to net cash used by operating activities:      Depreciation and amortization 90,685  90,465 Stock compensation/stock option amortization 2,572,741  3,152,943 Discount amortization 19,000  2,775,000 Allowance for bad debt ––  236 Gain on disposal of subsidiary ––  (5,079,416)(Gain) loss on extinguishment of debt 915,615  (22,931,148)(Gain) loss on fair value adjustments (105,141) 156,300 Loss on settlement 33,272  –– Debt accretion 136,582  791,125 Changes in operating assets and liabilities:      Decrease in trade and other receivables ––  3,039 (Increase) in deposits (7,800) –– Increase in accounts payable and accrued expenses 95,155  1,398,093 Increase in royalties payable 7,258  –– Increase in related party payables 886,383  492,356 Net cash used by operating activities (1,814,529) (1,070,725)       Cash flows from investing activities:      Purchase of professional equipment (2,628) –– Net cash used by investing activities (2,628) ––        Cash flows from financing activities:      Proceeds from notes payable 220,000  –– Repayment of notes payable (22,675) (5,451)Proceeds from convertible notes payable 556,780  825,000 Repayment of convertible notes payable (65,000) (50,000)Repayment of debentures (754,369) –– Proceeds from issuance of preferred shares 69,000  300,000 Proceeds from issuance of common shares 1,825,132  41,250 Net cash provided by financing activities 1,828,868  1,110,799        Net cash provided by continuing operations 11,711  40,074        Cash flows from discontinued operations:      Net cash used by operating activities ––  (39,942)Net cash used by discontinued operations ––  (39,942)       Net increase in cash 11,711  132        Cash - beginning of period 262  183        Cash - end of period$11,973 $315        NON-CASH ACTIVITIES      Discounts on long-term liabilities$19,000 $2,775,000 Beneficial conversion feature of convertible promissory note$–– $347,457 Fair value of stock warrants$335,310 $810,000 Embedded conversion option of convertible promissory notes$9,370 $850 Deemed dividends on preferred stock$–– $283,347 Dividends paid in kind on preferred stock returned to treasury$58,232 $–– Conversion of preferred stock to common stock$69,000 $–– Preferred stock returned to treasury for debt settlement$100,000 $–– Conversion of accounts payable to convertible note payable$20,000 $37,500 Conversion of related party payables to preferred stock$–– $450,000 Conversion of accounts payable to related party convertible note payable$20,000 $–– Conversion of convertible notes payable to common stock$1,093,240 $296,114 Conversion of related party convertible notes payable to common stock$1,021,057 $–– Conversion of related party convertible notes payable to non-related party convertible notes payable$–– $576,154 Conversion of related party payables to non-related party payables$–– $42,356 Subscriptions receivable$(500,000)$(92)       SUPPLEMENTAL INFORMATION      Interest paid      Continuing operations$539,476 $798 Discontinued operations$–– $106 Income taxes paid$–– $––         The accompanying notes are an integral part of these consolidated financial statements